The War In The Middle East May Affect The Performance Of Commercial Contracts

The war in the Middle East is affecting not only human life but also commercial, international commercial contracts and investment decisions. Dr. Umut Metin, Managing Partner of EPTALEX MTN, shared important assessments with the Turkish media (IHA) regarding the potential legal implications of war on commercial contracts and international business relations.

Dr. Metin first emphasized that EPTALEX continues to operate actively in the United Arab Emirates, Saudi Arabia and Lebanon, which are among the countries affected by the regional developments, and that the firm’s legal services continue without interruption.

War and Commercial Contracts

In regions where war and armed conflict occur, it is often difficult to argue that commercial contracts remain completely unaffected. War does not only threaten life and property but can also directly disrupt the continuity of commercial activities and the performance of contractual obligations.

For this reason, expecting companies to fulfill their contractual obligations under the same conditions as if nothing had changed may not always be realistic in times of war.

Can War Constitute Force Majeure? What Are the Legal Consequences?

Events that occur beyond the control of the parties, that are unforeseeable, and that cannot be prevented despite all reasonable precautions may be considered force majeure. War is one of the events that may fall within this category.

However, the mere existence of war does not automatically constitute force majeure for every contract. The decisive factor is whether the war actually prevents the performance of contractual obligations arising from the contract. The duration of the conflict may also be a significant factor. If the parties are still able to perform their obligations, a force majeure claim may not arise from a legal perspective.

Notification of Force Majeure and Contractual Obligations

If war creates serious difficulties in fulfilling contractual obligations, the situation should be promptly notified to the counterparty. In many modern commercial contracts, notification by e-mail is considered sufficient, unless the contract specifically requires another form of notification.

Possible Implications for Investments and International Commercial Relations

For businesspeople with investments in the Gulf region — particularly in cities such as Dubai — these developments may raise important legal questions.

For example, in the “off-plan” real estate investment model, which is widely used in Dubai, investors undertake installment payment obligations according to a payment schedule while the project is still under construction.

If the economic effects of war significantly weaken an investor’s ability to meet payment obligations, legal options such as invoking force majeure, requesting payment deferral, or withdrawing from the contract may arise depending on the specific circumstances of the case.

For this reason, it is crucial for the business community to carefully review the force majeure and termination clauses in international contracts and closely monitor ongoing developments.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.